Macquarie Shinhan joint venture establishes Korea's first infrastructure fund

13 January 2003

LONDON - Macquarie Bank announced the establishment of Korea’s first private infrastructure fund in a joint venture with Shinhan Financial Group. The Korean Road Infrastructure Fund has raised Won 247 billion (€198m) from a range of Korean institutional investors, with plans to raise additional funds this year. It will invest predominantly in Korean toll roads and tunnels.

Macquarie Bank and members of the Shinhan Financial Group have committed Won 30 billion (€24m) and Won 45 billion (€36m), respectively to the Korean Road Infrastructure Fund (KRIF). The fund is a 10-year closed end fund and is seeking to raise commitments of at least Won 350 billion (€280m) by mid-2003.

The Macquarie Bank Group currently manages more than €6 billion in infrastructure funds, which have direct and indirect investments in over 30 toll roads around the world. The establishment of KRIF follows the success of the Macquarie Infrastructure Group (MIG), a €3.4 billion ($A6.2b) Australian listed fund that invests in toll road infrastructure assets globally. MIG’s investments include substantial interests in two of the world’s largest toll roads – the Midlands Expressway in the UK and Highway 407 near Toronto, Canada.

KRIF has secured exclusive or preferred positions to invest in six toll road assets located in Seoul and other major cities in Korea. Of these assets, three are currently operating and three are under construction. All assets have concession rights of 20 years or more.

The fund will be managed by Macquarie Shinhan Infrastructure Management Co., Ltd (MSIM), a Korean asset management company staffed by executives from the Macquarie Bank Group with expertise in infrastructure asset management, and by executives from Shinhan Bank.

“KRIF is the first specialised road fund in Korea established by the private sector and provides domestic Korean investors with a unique opportunity to invest in a range of local infrastructure projects,” said John Roberts, head of Macquarie’s infrastructure funds management team in the UK.

“Infrastructure investment represents stable and long-term growth for investors. Over the next 10 years it is estimated that 55 per cent, or Won 109 trillion (€88b) of Korea’s infrastructure expenditure will be privately financed. As a result we anticipate very significant interest in the fund,” he said.

“It is hoped that, in the future, this fund will be listed, thereby giving Korean retail investors the opportunity to invest in this stable asset class,” Mr Roberts said.

The Macquarie Bank Group provides specialist investment, advisory and financial services in select markets around the world, with 4700 people in 16 countries. The Group comprises Macquarie Bank, Australia’s leading investment bank, and its worldwide affiliated entities, including Macquarie Investment Management (UK) Ltd. Macquarie’s European activities are based in London, with additional offices in Frankfurt, Munich and Vienna.

For further information please contact:

Alison Jefferis
Corporate Communications
Macquarie Bank
Tel: +44 (0)20 7065 2335
Mob: (0)79 1938 2958

Andrew Waterworth
Financial Dynamics
Tel: +44 (0)20 7269 7127
Mob: (0) 7771 740484

For enquiries regarding the Korean market please contact:

John Walker
Executive Director
Macquarie Bank
Tel: +822 3705 8505
Mob: +8211 99440363